Economic Development in Denmark Before and During the World War/Development of Accident Insurance

Development of Accident Insurance

While sickness insurance thus took its course, accident insurance was for a long time unknown. The report of the Commission of 1885 proposed an arrangement very similar to the German system, whereby all workmen employed in the cultivation of lands, or in woods, or in industry, or in loading, unloading, etc., should be insured in public insurance companies. The proposal itself indicates a departure from the old idea that wages should be sufficient to cover all insurance expenses to the new attitude that expense incurred by a workman through an accident occurring while he is at work attaches to the employment and should be borne by the employer. That this view has come to prevail in Denmark as well as in Germany, shows to what extent 'professorial socialism' has spread. The compensation proposed was a yearly pension to the workman injured or to his surviving family in case of fatal accidents, the money to be obtained from a tax on the Hartkorn, as well as from the employers in the industries and trades comprised under the act. The legislature did not accept this proposal, however, and several years passed before an agreement relating to an accident insurance was arrived at. In the meantime the matter was left to private initiative, and several employers voluntarily introduced insurance for their workmen. The act of January 7, 1898, took this voluntary development into consideration and fixed upon the employers within the trades and industries specified in the act the responsibility for compensation. It permitted them, however, to transfer the risk to an insurance company, provided only that the company was one recognized by the government. This management of accident insurance was quite different from the German method. Thereupon there grew up a number of new insurance companies which assumed the risk for the compensations awarded to injured workmen, or to their surviving families, by the Workmen's Insurance Council. The natural outcome of this was the abolition of the system of annuities. When an accident occurred, a lump sum compensation was awarded, and it was considered a private affair of the people concerned whether they spent the money judiciously or injudiciously, whether they used it to start some new commercial industrial or agricultural enterprise, or whether they merely wasted it. On the whole this liberality seems to have been justified, the results bearing witness to the progress and common sense of the people thus benefited. The Workmen's Insurance Council upon which it devolved to apply the act, and especially to fix the compensations, was composed of representatives of both employers and workmen working in amicable co-operation. Legislation was continued along these lines, and a considerable number of activities were gradually brought under the accident insurance. In 1900 it was extended to the Danish fishermen; and, with the support of the state, independent fishermen were also allowed, on the payment of a low premium, to participate in it. In 1905 came an act for Accident Insurance for Seamen, which went a step further by enjoining on the employers the obligation to cover their risks by transferring them to an insurance company recognized by the government. Finally, in 1908, an act was passed which extended accident insurance to agricultural workers on estates of a certain value, the owners of which were likewise bound to transfer their risks to recognized companies; but the act also allowed both workmen and employers to effect voluntary insurance without regard to the size of the estate.

On the whole it may be said that this system had a good effect. It may, indeed, be taken for granted that only very few employers did not transfer their risks to a recognized insurance company. On the other hand, an obligation imposed upon them to do so could not be considered arbitrary interference with personal freedom when nearly all employers in the occupations concerned actually had insured their risk. This is the principle laid down in the long needed Codification of July 6, 1916 (which went into force on April 1, 1917), which at the same time added an extraordinary extension—that such insurance should affect not only industry, but also trade and commerce, public employees, shop clerks, etc., as well as domestic servants permanently or temporarily employed in private households; also persons engaged in forestry, agriculture, and horticulture, as well as in shipping and fishery. The duty to insure oneself is laid down as a principle, but the individual is left free to choose the company in which the insurance is effected. The law of July 6, 1916, has thus permanently drawn a very large part of the population under its influence, and it admits, moreover, a voluntary arrangement for certain independent groups.

If we examine the decisions made with regard to the duty of insurance or the reference of accidents under the law, we find that a great liberality underlies its extensive regulations, even in cases which, hastily considered, would seem to lie outside the scope of insurance. Under the law, for instance, comes such casual assistance as might be rendered in getting a wagon out of the mud or in helping a neighbour to catch a stray calf. If a nursemaid is injured when playing with her master's child; or if a seamstress working at home for a master tailor runs a needle into her eye in leaning over to tend her little daughter who sits beside her trying to sew; or if a six-year-old child helping on her father's farm is injured when leading a cow home from the field—all such cases likewise come under the law. So, too, a bathing accident from a ship, or from a boat belonging to the ship, is considered within the law. A death which formerly would have been considered an indisputable suicide may now be attributed to insanity. An explosion due to lack of caution is not now called a 'case of gross negligence'. Moreover, the same regard is shown for those, who, besides the person injured, may suffer from an accident; for example, if a servant girl has been helping her parents in the payment of taxes and the like, an injury to her gives them a just claim for compensation. If an employer has neglected to insure an injured employee, he is liable for the compensation; and if the damage is not covered by this compensation, the remaining amount is recoverable from the insurance companies. The amount thus imposed on the companies, as well as the expense which a liberal construction of the law will occasion, is certainly of but little financial importance. The thirty mutual societies, nine joint-stock companies and two insurance companies serving the interests of Danish ship-owners, fishermen, and seamen are apparently prospering under this law, and dissatisfaction on their part is rare.

The Workmen's Insurance Council, which is at the head of the whole system, and which in conformity with the provisions of the law decides whether any compensation shall be paid and, if so, what the amount shall be, will naturally, by the reason of its very composition, look first to the interests of the insured. The composition of the council corresponds to that which has served well in the Friendly Societies. It consists of four departments; one for industry (including private servants and the like), one for shipping, one for fishery, and one for agriculture. In each department there are three members appointed by the Crown, one of whom is the chairman of the council, two representatives of the employers and two of the workmen; these, as well as the representatives of the persons voluntarily insured, are appointed by the government. The representatives of employers and workmen are appointed after nomination by institutions officially authorized to do so, namely, the Danish Employers' and Masters' Union, the League of Federated Trades, the Federative Agricultural Unions, and the Federative Danish Cottars' Unions. These organizations act as states within the state, and by mutual negotiations they have settled many disputes in such a way that the result, as stated above, is generally to the advantage of the insured.

Further development is of course possible. It may be along the line of greater concentration, as, for example, by placing all risks in one or two public insurance institutions only; or it may consist in increasing the amount of compensation in view of the decreased value of money. In general, however, the system has been perfected, and certain problems have been solved in a manner satisfactory to the lower classes of the population.